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The $1.2 billion Interstate 5 Rose Quarter Improvement Project was dealt a setback this week by the Federal Highway Administration, which rescinded a finding of 鈥渘o significant impact鈥� for the project.

That means the Oregon Department of Transportation must complete an environmental assessment, slowing the approval process.

鈥淭his means that the environmental process will still be taking place, but it is going to take longer,鈥� Rose Quarter project director Megan Channell said. 鈥淚t is going to take a few more months, with completion expected by the end of this year instead of summertime.鈥�

Channell’s comments came during Thursday’s Oregon Transportation Commission meeting.

Commissioner Sharon Smith, of Bend, said she was concerned by the 鈥渃ontinued delays and cost increases鈥� for the massive project.

鈥淚t’s just daunting,鈥� she said. 鈥淚t’s just really daunting.鈥�

FHA Division Administrator Phillip A. Ditzler rescinded the 鈥渘o significant impact鈥� finding in a letter to ODOT on Tuesday. Project opponents, who have questioned the environmental impact and cost of widening I-5, cast the finding’s revocation as a victory.

鈥淣o More Freeways has said for a long time that ODOT has not meaningfully studied the disastrous impacts this proposed freeway expansion would have to our community,鈥� Aaron Brown, organizer of the activist group, stated in a news release.

No More Freeways had filed a lawsuit in April 2021 against ODOT regarding the finding of no significant impact.

鈥淲e remain concerned about this project disrupting our streets and discouraging development for years of construction before increasing traffic, congestion and pollution for future generations,鈥� stated Allan Rudwick, co-chairman of the Eliot Neighborhood Association and a lawsuit plaintiff.

ODOT and industry groups portray the project as a chance to modernize I-5 while providing construction jobs and supporting a new generation of contractors.

Also Thursday, ODOT revealed a revised project design that features one large freeway cover. It would maintain the Flint Avenue crossing over I-5 and replace the Clackamas Bicycle and Pedestrian Bridge with the Broadway/Weidler Green Loop. The design iteration also reduces highway inside shoulder widths.

Budget estimates remained the same, at $1.18 billion to $1.25 billion. The highway covers in that option could support three-story buildings. For an additional $172 million to $200 million, the covers could be built strong enough to support structures up to six stories.

A funding shortfall persists, Channell said.

鈥淲e have a substantial gap and today no other sources of committed funding,鈥� she said. 鈥淪o that is our focus ahead as we continue to progress the financial planning process.鈥�

The Legislature funded $30 million annually beginning this year. The state can leverage an additional $500 million to $700 million through bonds. There is still uncertainty about how much funding will be available from the federal Infrastructure Investment and Jobs Act, and the fate of the Biden administration’s Build Back Better bill, ODOT officials said.

ODOT officials essentially punted on providing a fuller financial picture to the OTC on Thursday.

鈥淲e want to bring something to you as a funding plan that’s ready for prime time,鈥� said Brendan Finn, director of ODOT’s Urban Mobility Office. 鈥淲e want to give you some certainty. Because there’s some other things we need to unpack 鈥� the uncertainty of Build Back Better out there as well 鈥� we’re asking for your patience so we can bring you a real concrete product as it relates to the financial plan.鈥�

ODOT’s timeline calls for early construction work to begin in mid-2023, with the main construction resulting in the second half of 2025. At that time, tolling would also be implemented.

ODOT is looking at the project’s early stages to provide a leg up for disadvantaged and emerging contractors.

鈥淚t’s really with these early work packages that we’ll see some of the greatest opportunities for the disadvantaged business enterprise jobs,鈥� Channell said.